Property Sales Slump: USDCAD Experiences Volatile Upswing

Summary:

With market anxiety remaining high, the Canadian dollar is likely to remain vulnerable; recent incidents of vessel seizures and attacks in the region have caused the ‘risk premium’ on oil to fluctuate, leaving this commodity-linked currency on the back foot.

BUY USDCAD

Close Time

CLOSED

1.37399

Entry Price

1.41000

1.35000

1.39889 +0.00233 +0.17%

58.0

Pips

Profit

1.35000

1.37979

Exit Price

1.37399

Entry Price

1.41000

Fundamentals

In its latest meeting minutes, the Bank of Canada noted that the conflict in Iran and US trade policy have become the primary sources of uncertainty in current interest rate decision-making. Sharp fluctuations in energy prices—particularly the rise in oil prices driven by tensions in the Middle East—are placing additional pressure on the inflation outlook; at the same time, potential changes to US tariff policies are creating uncertainty for Canadian exports and overall economic growth. Against this backdrop, the Bank of Canada opted to keep the key overnight rate unchanged at 2.25% and expects inflation to reach a temporary peak of around 3% in 2026, before gradually returning to the 2% policy target.

The US economy has demonstrated greater resilience, but it also faces the challenge of rising inflationary pressures. In the labour market, the latest data shows that initial jobless claims rose slightly to 211,000; although this was slightly higher than expected, the figure remains within a healthy range overall. The number of people claiming continued unemployment benefits has increased, indicating a slight slowdown in the pace of hiring. Although the conflict in the Middle East has driven up energy and raw material costs, thereby intensifying pressure on corporate profits, the US labour market has yet to show any significant signs of deterioration. Non-farm payrolls continued to grow steadily in April, whilst the unemployment rate remained at a relatively low level of 4.3%.

Technical Analysis

Looking at the USD/CAD on the four-hour chart, the Bollinger Bands are widening upwards and the moving averages are diverging upwards, indicating that the overall bullish trend remains intact. The RSI stands at 71, indicating that market sentiment is predominantly bullish. On the daily chart, the Bollinger Bands are narrowing, moving averages are flattening, and following a bullish crossover on the MACD, the fast and slow lines are retracing towards the 0-line; prices are likely to rebound towards the 200-day EMA. The RSI stands at 57, suggesting a generally optimistic market sentiment. The recommended strategy is to buy on dips.

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Trading Recommendation

Trading Direction: Buy

Entry Price: 1.371

Target Price: 1.41

Stop-loss Price: 1.35

Support Levels: 1.35, 1.325, 1.28

Resistance Levels: 1.4, 1.41, 1.42

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Property Sales Slump: USDCAD Experiences Volatile Upswing

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